Home Global Economy Russian media believes China flared artificial GDP growth

Russian media believes China flared artificial GDP growth


The Russian media doubts the GDP growth of China which superseded Japan’s economy in 2010. It alleges China of manipulation in its GDP figures.

Media Research company Chinascope published a report from Radio Free Asia, which cited a commentary that appeared in Russian daily Kommersant. The piece, titled “The Deception of the GDP,” claimed that the GDP was doctored by ‘powerful ruling class’ for self-interest, as reported by ANI.

The report claimed that the artificial inflation of the GDP figures was directed by China that hinges on GDP worship. Even the prevalence of  non-productive economic activity drew this growth result which clearly turns out to be artificial.

China’s GDP had reached an all time high of 2.40 per cent in the first quarter of 2011.

“To a certain extent, this is very similar to the practices of the former Soviet Union and Japan in 1980. Everyone knows what happened to those two countries,” Chinascope wrote.

The Russian media suspects that China fudging the GDP could be merely a tool to compete with the West.

Restating the Kommersant report, which was taken up by Radio Free Asia, Chinascope wrote that “this is not to say that there is no unproductive economic activity in the western market economies, but it is far less than such economic activities in China.”

Chinascope mentioned of a company that constructed a stadium in a contribution to the GDP of the country. But the company failed to fetch any profitable wealth for itself with this project and instead faced several financial difficulties.

“In this case, the growth of GDP negatively impacted economic power,” the article deduced. So how can the GDP growth mean there is an economic growth?

An economic analyst and TV show host compared the Chinese economy with a fragile bubble that can burst at any time. “There is a very simple statistic to know: 75 percent of the Chinese people’s wealth is in the property market. You don’t need to explain anything else. The Chinese leaders think they are the smartest and can shrink the bubble slowly and painlessly,” Chinascope quoted the analyst as saying.

The experts in Russia suggested that Chinese economists must understand the economy as, “the calculation of real economic strength should exclude non-productive financial investment from GDP, make adjustments for income distribution, and replace the GDP value with calculations of the basic assets of the society.”

(With inputs from ANI)